Lakebed lease challenge partly failed as the project was preserved but an excessive long-term lease was curtailed.

Public interest challenges to a tourism project were not rejected solely for delay or lack of bona fides, although the petitioners' conduct remained relevant to the merits. The Court also declined to invalidate the lease in its entirety, finding that the record showed only a limited portion of the land to be lake-related, while the rest had been identified for development, and that the later wetland rules did not retrospectively undo the earlier lease. However, a 99-year lease was held to be excessive under the applicable rules, so the arrangement was severed and the lease term reduced to 30 years, with protected carve-outs for the promenade and specified land parcels.

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Issues: (i) whether the public interest litigations were liable to be rejected for delay, laches and want of bona fides; (ii) whether the lease of the project area was invalid on the ground that the land formed part of the lakebed or a wetland and was hit by the Wetlands (Conservation and Management) Rules, 2010 and environmental clearance requirements; (iii) whether the lease period of 99 years could be sustained.

Issue (i): Whether the public interest litigations were liable to be rejected for delay, laches and want of bona fides.

Analysis: The challenge to the project was brought several years after the tender process had begun, the project had been approved through successive governmental decisions, and substantial implementation had already taken place. The record also showed that the project had been conceived long before the petitions were filed, with multiple approvals and expert inputs at different stages. Although the delay and the petitioners' conduct were relevant considerations, the controversy was examined on merits rather than being dismissed solely on maintainability grounds.

Conclusion: The petitions were not rejected on delay or bona fide grounds, though the Court found the delay and conduct relevant in assessing the challenge.

Issue (ii): Whether the lease of the project area was invalid on the ground that the land formed part of the lakebed or a wetland and was hit by the Wetlands (Conservation and Management) Rules, 2010 and environmental clearance requirements.

Analysis: The Court examined the revenue record, the master plans, the detailed project report and the historical development of the site. It found that only a limited portion of the disputed land was shown as submerged or lake-related, while the remaining land was shown as development land and had been identified for tourism use in the master plans. The Wetlands (Conservation and Management) Rules, 2010 were held not to operate retrospectively to undo an earlier lease, and the environmental clearance already obtained under the 2006 regime was treated as sufficient for the project as approved. The Court therefore declined to sustain the wholesale invalidation of the lease.

Conclusion: The lease was not liable to be cancelled in its entirety on the ground of lakebed, wetland, or environmental illegality.

Issue (iii): Whether the lease period of 99 years could be sustained.

Analysis: The Court held that the grant of a 99-year lease amounted in effect to an impermissibly long tenure under the applicable rules. At the same time, it accepted the severability of the lease arrangement and preserved the project subject to reduction of the lease term. It also protected the public promenade and the two identified chunks of land by excluding one from the lease and treating the other as a construction-free zone.

Conclusion: The 99-year lease period was unsustainable and was reduced to 30 years from the date of judgment, with the project otherwise saved subject to the stated land carve-outs and restrictions.

Final Conclusion: The Court upheld the project in substantial part, set aside the total cancellation ordered by the High Court, protected the public promenade and lake-related land to the extent specified, and modified the lease to a shorter tenure so that the development could continue within the lawful limits identified by the Court.

Ratio Decidendi: Where a public project has been approved through expert and governmental processes and the challenged land is only partly shown to be lake-related, the Court may sever the offending portion and preserve the project, but an impermissibly long lease tenure must be corrected in accordance with the governing rules.

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